Turney Company produces and sells automobile batteries, the heavy-duty HD-240. T

Question

Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2010 sales budget is as follows.

Quarter HD-240
1 5,000
2 7,000
3 8,000
4 10,000

The January 1, 2010, inventory of HD-240 is 2,500 units. Management desires an ending inventory each quarter equal to 50% of the next quarter's sales. Sales in the first quarter of 2011 are expected to be 30% higher than sales in the same quarter in 2010.

Complete quarterly production budgets for each quarter and in total for 2010.

TURNEY COMPANY
Production Budget

For the Year Ending December 31, 2010
Product HD-240


Quarter



1


2


3


4


Year

Add:








Total required units
Less:








Required production units

Explanation / Answer

if all quarters have 30% increase then add 30% to sales of 2007 quarters and proceed from there. Then for the first quarter. Sales 5000 + 1500 = 6500 Ending inventory 2nd qtr. 7000+2100=9100x40%= 3640 Beginning inventory 5000 x 40% = 2000 Production 8140 this is for the first quarter and you can for others

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